SAP Conference examines lagging Canadian productivity

Nate Silver at SAP Canada’s “Conversations on the Future of Business” event in Toronto, November 7th, 2013.SAP Canada has launched a series of talks across North America, called “Conversations on the Future of Business”, the latest of which occurred recently in Toronto and featured keynote speaker Nate Silver, followed by a panel featuring several business leaders who engaged in a wide-ranging discussion.

Terry Madore, Chief Operating Officer at SAP, took to the stage, introducing what he regards as the new SAP, which involves a new way of engaging customers with a focus on co-innovation and design thinking. This event is the result of SAP’s new strategy to not only talk about products, but also to provide a venue for a conversation among business leaders. It is, in effect, a form of insight marketing.

The panel, which followed a speech by Silver on the role of data analytics in the future of business, pondered the big questions, such as the changing nature of the work force and the pace of change, looking forward to the year 2020. The panel consisted of Victor Woo, Director at Cisco Systems; Karie Willyerd, VP and Chief Learning Officer at SuccessFactors; Steven Kramer, Executive Vice President Americas for hybris Group; Mario D’Amico, Senior Vice President at Cirque du Soleil; and Terry Stuart, Deloitte’s Chief Innovation Officer.

For Terry Stuart, the problem of innovation in Canada goes right back to education. A productivity report by Deloitte last month focuses on education, starting at K-12. He also mentioned the importance of fixing our immigration policies, fixing our tax credit policies, and beginning to invest more in our country and people. Stuart pointed to the Canadian Coalition for Tomorrow’s ICT Skills (CCICT), on whose advisory board he sits. That firm is seeing the demand for ICT professionals surging, coupled with a diminishing supply of people interested in acquiring these skills.

The panel also addressed Canada’s well-publicized productivity crisis, pointing out that Canada ranks 14th on a list of the most productive countries produced by the World Economic Forum. Canada was edged out by Switzerland, Singapore, Finland, Germany and even the United States, which struggles with a deeper financial crisis than Canada has had to contend with. The report faults mainly R&D spending at the company level, which is low compared to countries higher up in the rankings.

Sizing up the challenge of righting that ship, Stuart asks, “What are the fundamental challenges we have, and how do we start to change the trajectory?” Part of the problem lies in a false perception by business leaders that they are equally as productive as their international peers.

Interestingly, 900 Canadian and U.S. CEOs were asked to rank themselves and painted an almost identical picture of their perceived level of risk-taking and corporate investment. The data tells a different story.

“There’s a perception we have as Canadians, that we’re doing things that are risk-seeking, that are innovative, etc. But we’re not actually walking the talk and living it,” says Stuart. The Canadian cohort, which came to be known as the “overconfident cohort” constituted 36% of companies who believed they were investing the same amount that their peers invested in boosting productivity.

Dynamic companies knowingly couple investment with risk-taking and see a corresponding increase in productivity. But many companies don’t think they need, for example, government or outside help, and suffer the productivity consequences.

Victor Woo discussed the ever looming Internet of Things. With the advent of social media and cloud-building transforming Internet 1.0 ways of communicating (e-mail and web access, basically), we’re moving towards a new approach to technology in which everyday objects will be connected to cloud-based data processing. He made a point about how the Internet of Everything, and the data produced by it, can spur innovation and productivity by making most aspects of life more efficient. Cities will be installing sensors to make parking more efficient, for example, and business will increasingly rely on M2M technology.

Steven Kramer predicts a sea change coming to the nature of corporate strategy. “The best omni-channel projects that we’ve worked on are projects where the CEO and the executive team have really embraced the fact that their organization needs to change. That what used to be separate silos, customer service, the physical stores, the web channel, those lines have essentially been broken down, and they need to reorganize their companies in order to really have a customer experience team.”

These changes are also somewhat dictated by the speed of technology. Three years ago, major retailers were asking, “Do you think mobile is really going to have an effect on our business?” This is not a question anymore. The question now is, what will all this look like in 2020? The adoption of things like the mobile wallet, for example, will be driven by millennials, or people who don’t remember life before ubiquitous internet and social media.

Karie Willyerd points out that in the United States, 10,000 people a day turn 65. Generation X, it turns out, is a very small generation, spawned by people who had one or two kids but came from families of half a dozen or so siblings themselves. Essentially, Generation X is the product of the dawn of birth control, and as such, lucky to be alive at all. The jobs that the older generation are now abandoning are simply too numerous for Gen X to fill. “So we’re going to give big jobs to that next big generation, which in both Canada and the U.S. is the millennials. So by 2020, 50% of our work force are going to be millennials.”

She wittily refers to Generation X as “the Prince Charles generation.” Will they ever get to be king?

Mario D’Amico brings some of his experience of designing customer experience with Cirque du Soleil in solving some of the problems which increasingly face all industries now, regardless of vertical. “The first challenge is identifying, what is a great customer experience vs. a good one? And that will vary, obviously, from brand to brand and organization to organization. And then, because of the rapid change we’re all living, once that great experience is identified, that actually becomes the norm.”

He cites the way Cirque du Soleil has transformed the circus-going experience in such a way that no one can remember what circuses were like in the good old days. He also asks if anyone remembers the days when, if you tried to buy tickets online, Ticketmaster didn’t let you choose your own seats. You were at their mercy. Likewise with airplanes and banking. Once it becomes the norm that the consumer gets to do something as trivial as choosing their seat, there is no going back. Frictionless customer service is now the norm, and the minor inconveniences of the past seem unimaginably crude. D’Amico points out that the only way all of this doesn’t seem very Big Brother is if it is done seamlessly.

When the talk turned to Big Data, Stuart mentioned the crowdsourcing of labour: “IT development, video development, algorithm development, strategy development, 10x, Kaggle” and other crowdsourcing talent agencies. “Kaggle is a crowdsource company. So you take your data, you anonymize it and give it to them, they go and work with 120,000 data scientists from around the world to give you a better algorithm.” He mentions that AllState, who already have data scientists working for them, decided to try Kaggle out, just to test it versus their own model. They gave Kaggle an anonymized data set, and Kaggle took six weeks to figure out a problem that AllState’s data scientists had been working on for two years.

The question around the future of work, then is, do we even need to maintain the hierarchical structures of most companies, given that many millennials will likely not even want to work for your company, but may prefer to freelance as specialists in the crowd. From the company perspective, this opens up whole new world of tasks that are likely better outsourced to arms-length specialists and consultants.

Among the takeaway messages from this conference was that creating a customer experience in which people don’t necessarily realize that they’re being marketed to is perhaps the most effective way of creating stickiness. By the end of the evening, it’s safe to say that most attendees, in engaging in a conversation rather than a pure sales event, may have forgotten that they had just been successfully marketed to.